Hartleys expects $8.3m from Gryphon’s gold project

Following the August release of
Gryphon Minerals
’ bankable feasibility study in relation to the Banfora gold project in Burkina Faso, analysts at Hartleys released their modelling which points to annualised production of 80,000 ounces over a nine-year mine life.

The broker expects production to start in 2015-16 with about 18,000 ounces attributable to Gryphon, ramping up substantially in 2016-17 to 71,600 ounces. Based on a gold price of $US1296 the broker expects this to generate a profit of $8.3 million representing earnings per share of 8.3¢.

Hartleys values the Banfora project at 34¢ per share and its 12-month price target is 35¢, implying a price-earnings multiple of 4.2 relative to 2016-17 forecasts.

However, a real game changer would be the addition of a 2 million tonnes per annum carbon in leach plant which would have much higher recoveries in the order of about 92 per cent.

This could result in production increasing to approximately 150,000 ounces per annum.

Hartleys expects recent exploration success to result in an increase in the current reserve estimate of 850,000 ounces which would serve to justify consideration of increased processing capacity.

SI view: As well as Banfora, Gryphon is in the process of exploring highly prospective tenements located on the Hounde Belt, also in Burkina Faso and near Roxgold’s high-grade Yaramoko deposit of 810,000 ounces at 15.8 grams per tonne.